Handling the Delay in 199A Regs

Brace for tough conversations, more extensions.

By Stephen Nelson

Pretty clearly, the Section 199A final regulations won’t appear before Dec. 31, 2018. The draft version of the final regulations went to the Office of Budget and Management on Dec. 14, 2018. And the review process almost certainly won’t finish in time for the new regulations to appear in the Federal Register before New Year’s Eve.

Note: The Department of Treasury did not designate the final regulations as economically significant. That means OMB has 45 days to review the regulations.

This timing hugely impacts tax accountants preparing returns with qualified business income, the income partially sheltered by the new Section 199A deduction.

Note: Qualified business income includes sole proprietorship profits, trade or business income earned in an S corporation or partnership, rental income in most cases, REIT dividends and then also income from qualified agricultural or horticultural cooperatives. In short, lots of taxpayers earn qualified business income.

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Stephen L. Nelson



About the Author

Stephen L. Nelson is a working CPA in the Seattle area who specializes in serving small businesses and their owners.

Nelson is the author of the best-selling ebooks Maximizing Sec. 199A Deductions and Setting Low Salaries for S Corporations, available through CPA Trendlines directly from his website for instant download.

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He’s been a CPA for three decades, and his greatest expertise lies with tax issues related to S Corporations, foreign tax issues, small business consulting, financial planning, and individuals with complex personal finances. Steve has an MBA in finance from the University of Washington and an MS in tax from Golden Gate University. He worked as an adjunct professor at Golden Gate University’s graduate tax school and is the author of numerous software how-to books such as the bestselling QuickBooks for Dummies and Quicken for Dummies.

Steve’s received a lot of attention for his work over the years. For example, he’s been interviewed by the Wall Street Journal twice, most recently about target retirement funds. Fortune Small Business has consulted Steve as an expert on tax issues related to LLCs, Imke Ratchko’s New York small business law blog has favorably reviewed his DIY Incorporation Kits, and J.D. Meier solicited a guest post from Steve for his high-profile Sources of Insight blog, titled “The Five Small Business Success Formulas.”

You can learn more about Steve’s firm, Stephen L. Nelson CPA, PLLC, by following the link to the firm website or by calling his office at (425) 881-7350.

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